Bank of Israel Governor Stanley Fischer to the Conference of Presidents: "International Calls for Boycott of Israeli Goods No Real Threat to Israeli Economy"

"The relatively high 5% growth achieved in 2003-08 resulted from our strong ­– conservative – banking system, which proved to work well even in a time of crisis, and despite common criticism," Fischer noted. He also referred to the Bank of Israel's strategic decision to buy US dollars at a more rapid rate, up to $100 million a day, due to the NIS/USD pressure, a phenomenon that started in early 2008 and increased during the very early stages of the global financial crisis, currency became gradually more valuable. "For Israel," Fischer explained, "it is a significant amount. This was the most important move in the dynamics of the crisis." Fischer noted that further support came from the Treasury and the Supervisor of Banks, which ensured that Israeli banks were closely watched.

In reference to recent international calls for the boycott of Israeli goods, Bank of Israel Governor Fischer stated that although threats of boycotting the Israeli economy do effect as it is highly dependent on international trade, it has not posed it any real threat to date.

Speaking to the top American Jewish leaders, Fischer noted that by international standards, Israel's economy is relatively advanced, despite a series of local events that could have affected it, from Prime Minister Ariel Sharon's inability to continue office as well as the resignation of former Prime Minister Ehud Olmert, to the election of Hamas and the second Lebanon War in 2006. Fischer attributed this strength to the maturity and stability of the Israeli economy, which appears separated from the turbulent political events Israel has been experiencing in past years.

Four fundamental issues that the Bank of Israel Governor raised as urgent weaknesses impacting Israel's economy are inefficient government bureaucracy, the state of physical infrastructure such as transportation infrastructure, decline of educational standards – especially in comparison to other countries and despite the high dependence of the Israeli economy on its intellectual assets, and culturally determined demographic challenges such as the overwhelming poverty rates within the Orthodox Jewish population (currently at 16%), as well as the 50% poverty rate of the Arab population, which is notably going down thanks to the important work being done enlist women as well into the working population.

Despite these long-term and challenging tasks, Governor Fischer provides an optimistic outlook, stating – "the Israeli economy, currently emerging out of the recession, will remain relatively safe, mainly owing to its entrepreneurial nature as a 'Startup nation'."